Article: GCCs in India: A catalyst of change in the talent landscape

Talent Management

GCCs in India: A catalyst of change in the talent landscape

Over the past few years, India has significantly developed its digital and technological capabilities along with ensuring that the talent pool is equipped with the knowledge to leverage these capabilities, making it one of the most promising and lucrative locations for the expansion of global capability centers.
GCCs in India: A catalyst of change in the talent landscape

Attracted by the talent pool, enabling policies, digital infrastructure, and competitive cost structure, MNCs have long embraced India as a preferred destination for global capability centers (GCCs). It is estimated that India has more than 1700 GCCs with global market share of over 50%.

It employs around 1 million professionals and has an economic value of around $30 billion. Currently, the lion's share belongs to US MNCs with dominating industries being BSFI, engineering and manufacturing, tech and consulting.

Today, GCCs are dedicated centers focused on collaboration and innovation that drive up the value offered by businesses. Now, many aspects of a new product being launched in the global market are developed by a competent team of engineers/researchers based out of the GCCs in India.

GCCs forayed into India more than two decades back and currently, it is one of the key industry sectors in India.  Today there are over 1500 MNCs with more than 2600 centres spread across India.  The number of GCCs in the country is likely to grow at a rate of 6-7% to over 1900 by 2025, according to a report by Nasscom and Zinnov. 

“The construct or composition of GCCs have also changed over the years. What started as only call centres and operations support centres, have now given its way to being a full-service bank within a bank except the market facing roles.  Today most companies drive their digitisation agenda through their GCCs in India.  Many MNCs have moved way beyond just the transactional roles and have senior Global leadership roles based in India,” says Mohua Sengupta, managing director, Mashreq Global Network.

She further says in the GCC world, India is asserting its presence by driving business outcomes across functions and its leading the pack as the most preferred destination. 

Rajesh Bharatiya, managing director at Pune-based recruitment firm Peoplefy says  the confidence of the parent organisation in the capability of their GCCs in India has solidified over the past few years.

What is driving GCCs up the value curve?

There is a marked shift in the mindset of looking at GCCs from a labour (cost) arbitrage to a value play.

“GCCs are emerging as centres of excellence (CoE) for innovation. Digital and innovation are the new levers of growth for GCCs. In today’s world, no organisation, irrespective of their nature / line of business, can remain tech-agnostic. Post pandemics, there is an even higher push in all organisations to provide their products and services in an omni-channel, anytime-anywhere manner. Such trends augur well for the growth of GCCs,” says Bharatiya.

Amit Kalra, head GBS centres India, Swiss Re, says strengthening of digital, analytical, and technological capabilities have become the key levers driving transformation. “As data is increasingly becoming an essential fuel for businesses across industries, it will be of utmost priority for organisations to identify the right approach to navigate through the available data to predict and mitigate uncertainties and re-evaluate their business models to drive growth in the new normal,” he adds.

Sengupta says the reasons behind this unprecedented growth has changed over the past few decades.

While the initial driver was primarily cost arbitrage, over time it has become the availability of engineering graduates, and now the key driver is the fact that India has the biggest pool of digital resources. 

“With the pandemic changing our lives forever, organisations across the globe have adapted themselves to functioning in the ‘new normal. Due to their structure, capabilities, and cost-effectiveness, GCCs have played a decisive role in helping them navigate through these changes. That is the reason why most firms today are comfortable in running high-level knowledge processes from their GCCs including digital RPA, ML, and AI. The pandemic has accelerated the evolution of GCCs in India,” says Sengupta.

As per Rohit Gupta, head, tech center, thyssenkrupp India,  India is rapidly becoming a hub for establishing GCCs that incorporate the best practices with high accountability.

“The key levers of growth include resource allocation (dedicated personnel training staff to communicate and adopt digital practices), communication (instituting clear channels of communication), digital solutions in business processes, and accurate feedback on success metrics to the parent organisation. This can aid in the overall digital transformation journey and the formation of a strong governance model,” he adds.

What makes India a preferred GCC hub for global companies?

Over the past few years, India has significantly developed its digital and technological capabilities along with ensuring that the talent pool is equipped with the knowledge to leverage these capabilities.

“India also offers one of the most diverse workforces capable of driving innovations for multiple sectors and geographies. Further, India’s emergence as the global IT hub with cities such as Bangalore, Pune, Delhi/NCR and Hyderabad being host to multiple tech centers, has increased the faith of major global corporations in Indian talent’s ability to drive global innovations,” says Kalra.

“India has seen steady growth in the number of GCCs being set up by global MNCs over the last three-plus decades. Many of these have graduated from providing cost arbitrage to becoming a value generators for the business. These mature GCCs have developed CEOs with global roles in India,” adds Gupta.

The second growth factor for GCCs, as per Gupta, is the ample availability of talent in India.

“Additionally, digital transformation across sectors fuelled by the pandemic has pushed the demand for digital talent. Indian graduates are unfazed with learning, so we have seen an increase in software engineers skilled in data analytics/AI/automation over the last two years. Lastly, he says, the changes to government policies and programmes have brought ease in doing business and has made it a conducive environment for GCCs to thrive in India. 

Sengupta says India happens to be the most promising and lucrative location for expansion for multiple reasons which include :

Talent pool: The talent pool in India spreads across multiple skill sets allowing companies to hire the right talent which is best suited to the companies’ requirements, culture, and objectives. The country has successfully rebranded itself as a hub for talent across functions.

Tech-hub: India’s significant advantage is combining technology and specialists from different processes.  Most Indian engineering colleges/ business schools have now become conscious of tailoring their programmes to suit business needs. 

GCC Hub: India has emerged as a GCC hub and is now housing 50% of all global GCCs.  This in turn is fueling the aspiration of newer MNCs to create their centres in India.

Huge pool of English-speaking employees: This has remained a huge USP for India as a location for any MNC.

The country makes a compelling business case for itself in the aspects such as – talent, business atmosphere, infrastructure, resources, costs, governance, and technology.

“At Mashreq Global Network too, we believe that our strategic priority of ‘working from anywhere has presented us with an opportunity to create the best remote digital working experience for our employees,” Sengupta says. 

GCCs as a catalyst of change in the talent landscape

GCCs have a multipronged influence on the Indian talent landscape.

Besides bringing in newer work opportunities in the job market to the budding Indian talent pool, GCCs in India are investing in emerging digital technologies like cloud, data analytics, artificial intelligence, machine learning, robotic process automation and the internet of things.

GCCs largely emphasise on molding new-age skills such as agility, design-thinking, and innovative mindset along with digital skills.

“As a result, we have witnessed a significant shift in the talent landscape with a multitude of GCCs encouraging employees to upskill and reskill their industry knowledge to stay ahead of the curve. For instance, Swiss Re GBS India partnered with the Institute of Insurance and Risk Management ( IIRM), National Insurance Academy (NIA) and Birla Institute of Management and Technology (BIMTECH) to bridge the academic gap and empower the students with the right skill sets to lead the evolving global re/insurance ecosystem. Similarly, organisations in India are identifying the ideal skilling partners or developing their training modules to create a future-ready talent pool,” adds Kalra.

The technology landscape is continuously evolving, and digital disruption has led to new business models with newer ways of working. “This has driven up the demand for diverse skills at all levels and pushed global organisations to adapt to changes in leaps,” says Gupta.

Mature GCCs in India are already partnering with universities to design curriculum and training to prepare the industry workforce in the hands of GCC subject-matter experts (SME).

“For example, we at thyssenkrupp’s Technology Center in India, regularly take in college students as interns and give them an opportunity to showcase and hone their,” he adds.

Today, GCCs partner its global teams on innovation and look to add to their value chains. Thus, heavy investments in upskilling and reskilling have become commonplace for them.

“India has a pool of skilled talent who can drive advanced digital capabilities. At Mashreq Global Network too, we aim to collaborate with all group functions to enable and develop them into market leading talent to service platforms for Mashreq’s strategic, digital, and operational requirements globally,” says Sengupta.

Need to reimagine GCC space to groom future leaders 

As per Nasscom, the GCC segment in India will continue to expand as only 1,500 of the 10,000 global enterprises have set up GCCs in India till date.

There will be an increasing demand for leaders capable of building and redefining business ecosystems.

“Thus, GCCs will need to reimagine their strategy to build an effective leadership pipeline and retain them. In my opinion, a truly effective leader is someone who has a wide variety of skills and experiences. A few ways this can be achieved is knowledge on how to operate a business globally,” says Gupta.

Kalra says while a business leader primarily focuses on addressing the existing needs and challenges of a business, a GCC leader will have to focus not only on the current needs, but also continuously work towards reshaping the offerings landscape to ensure a sustained development of business as well as deliver on strategic imperatives of the group.

“Started from the backseat, the GCCs are emerging as a driving force for industries and hence a GCC leader will have to assume the role of a torchbearer. As India continues to attract more and more innovation centers, we need to develop a pool of leaders who are strategic, understand the diverse landscape and have sharp focus on delivering the business impact,” he sums up.

Roadblocks

The establishment of GCC also includes some roadblocks. The prevailing talent gap and rising demand results in frequent job movements amongst employees seeking better opportunities, this can impact an employer’s trust in the applicants, warns Gupta.

“For deep-tech or domain-specific verticals, there are significant investments necessary to get the resources ready to work with global teams. Again, though infrastructure development has caught pace over the last decade, there is scope from the connectivity and access perspective. Today, tier 2 and 3 cities also need international airports, because it has a gold mine of resources,” he adds.

“The primary roadblock that I foresee is our high attrition rate.  While most MNCs have got used to the high attrition rate in India, the current situation is making some of them think about alternatives,” says Sengupta.

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Topics: Talent Management, Technology, #Digital Transformation, #Hiring

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